Rising wheat prices cost Needham businesses big dough

Wednesday

Mar 26, 2008 at 12:01 AMMar 26, 2008 at 12:43 AM

A greater emphasis by farmers on corn crops for biofuel and soybean crops for diesel fuel, along with the rising cost of fuel in general, has “fueled” a significant increase in wheat prices, with local pizzerias and bakeries saying wheat prices have nearly tripled in the past year.

Steven Ryan

For local pizzerias and bakeries, rising dough is what their businesses are all about — but they could do without its rising price.

A greater emphasis by farmers on corn crops for biofuel and soybean crops for diesel fuel, along with the rising cost of fuel in general, has “fueled” a significant increase in wheat prices, with local pizzerias and bakeries saying wheat prices have nearly tripled in the past year.

With fuel from corn and soybeans being touted as an alternative to fossil fuel, farmers have been dedicating more land to those crops, reducing the amount of available farmland for wheat.

“Ultimately it comes down to ethanol,” said Daniel Cooley, a UMass-Amherst professor who studies the business of agriculture. “As the ethanol goes up, there’s more and more acres planted to corn and fewer acres to wheat, as the supply of wheat goes down, the prices of wheat goes up.”

At Hazel’s Bakery on Great Plain Avenue, the increasing price of flour has pushed up the price of certain breads and pastries. The price for a baguette at the bakery has gone from $2 last year to $2.25, with another 25-cent increase expected soon.

“The price is only up a quarter, but the price of flour has gone up threefolds,” said Steven Barton, the owner of Hazel’s Bakery. “I can’t raise my prices with the prices [of flour] because I’ll lose customers.”

Barton said he paid $4 for a bushel of flour at this time last year, but is now paying $15 a bushel.

The price of pizza at Kosta’s, which charges $11.75 for a large cheese pizza, hasn’t yet gone up. Mavrivis said he usually increases his prices once a year to stay ahead of increasing rents and other costs, but he is unwilling to make more frequent changes to keep up with the price of flour.

“Unfortunately, we can’t make prices just like that,” Mavrivis said. “I can’t be doing that to the customer.”

Over at Stone Hearth Pizza on Great Plain Avenue, the price of pizza hasn’t gone up yet either, although ownership hasn’t ruled out the possibility in the future. The price of a large cheese pizza at the sit-down restaurant is $12.75.

“We’ve held our prices,” said co-owner Jonathan Schwarz. “But at some point, we might have to pass along something to the consumer. We haven’t yet … We’re at an all-time low with our supply-and-demand curve.”

Although Schwarz isn’t aware of any potential change in the market, Barton said he was told things might soon improve.

“I just talked to the supplier today, and the price is almost topping out,” Barton said March 24. “And the winter wheat crop is supposed to be a big crop. And Easter was the last big holiday in which people use a lot of flour.”

Neither Schwarz, who founded Stone Hearth Pizza three years ago, nor Barton, whose been in the bakery business for about 20 years, can recall price increases for flour like this. And Barton said the price of butter and eggs has also gone “through the roof.”

Schwarz said the price of tomatoes has gone up, too, citing the increasing cost of fuel for the added cost of harvesting and transporting farm goods.

“We’re really seeing the end of cheap food for most of the postwar period,” Cooley said. “That era is out the window.”